Nearly every slice of the major asset classes bounced last week, led by strong gains in real estate shares and commodities, based on a set of ETFs through Friday’s close (Oct. 15). The only decline was in foreign high-yield bonds.

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* Dems will focus on finalizing Biden’s massive social spending bill this week
* Inflation poses rising political risk for Biden and Democrats
* World still reliant on fossil fuels amid surge in energy prices
* China’s GDP increased 4.9% year over year in Q3, less than expected
* Energy, real estate shocks are slowing China’s economy, with global implications
* Fallout in China’s property sector looks set to continue
* Investors expect central banks will keep rates too low for too long, survey shows
* NY Fed Mfg Index posts slightly softer growth in Oct amid supply-chain shortages
* US consumer sentiment fell in early Oct to second-lowest level in a decade:

● Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever
Robin Wigglesworth
Interview with author and excerpt via Marketplace.org
The finance industry has historically been adept at inventing new products that line its own pockets more than those of Main Street. The index fund is a rare exception to the rule. At a time when the gap between the haves and have-nots is widening everywhere, the positive impact that an initially much-maligned invention by a motley group of self-described finance industry renegades and heretics can have in the space of a few decades is inspirational. Nonetheless, new technologies — and that is essentially what the index fund is — always have side effects, and not all of them are positive. As index investing has grown, the initially snide comments have been replaced by concern, even fear. Over the past decade, it has become a crescendo. Paul Singer, a famous hedge fund manager, even argues that passive investing has grown into a “blob” that is now “in danger of devouring capitalism.”

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• Nearly everything rebounded this week
• Strong across-the-board rallies for all our portfolio benchmarks

Recovery: After six weeks of mostly weak performances, the bulls regained the narrative and drove nearly every slice of our global opportunity set of risk betas higher. The only loser in this week’s trading through today’s close (Friday, Oct. 15): foreign junk bonds (IHY). For details on all the strategies and metrics in the tables, see this summary.

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The once-bulletproof argument that investors could do no wrong by owning China stocks has suffered a reversal of fortunes in 2021. Cue up the contrarians, who are wondering if the correction in the country’s equity market this year, in sharp contrast with much of the rest of the world, hints at a buying opportunity.

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* President Biden signs bill to lift US debt ceiling through December
* Powell’s prospects for 2nd term at Fed dented but not derailed
* Brent oil futures top $85 a barrel for first time since October 2018
* Microsoft plans to close LinkedIn in China, citing onerous regulations
* United Auto Workers strike at John Deere, first time in 35 years
* US workers appear to be revolting against low pay and underpay
* State-run oil firms filling output gap left by lower production at Western firms
* SEC set to allow first US bitcoin futures fund to start trading
* Prices paid to US producers eased in September
* US jobless claims fell to a new pandemic low last week:

Inflation is no longer accelerating, but it’s not showing clear signs of declining from recent peaks either.

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* Gas shortage expected to force power plants to switch to oil
* US home heating costs projected to rise sharply this winter, federal gov’t advises
* Fed minutes: ‘gradual tapering process’ could start as early as mid-November
* Flatter 30yr-5yr Treasury yield curve suggests recession risk is rising
* Foreclosures surging as Covid mortgage bailouts expire
* China’s factory-gate prices soared to a near-26-year high in September
* Chinese developers shut out of global debt markets after Evergrande crisis
* Turkish currency at record low after president fires central bankers
* US headline consumer inflation ticked up to 5.4% annual rate in September:

Last month’s estimate of “fair value” for the US 10-year Treasury yield suggested that an upside bias for this benchmark rate was likely, or at least plausible. A month later, that outlook turned out to be spot on. Today’s update still suggests that more upside for the 10-year rate is still a reasonable view.

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* House votes to raise the US borrowing limit through December
* IMF cuts US and global economic growth estimates for 2021
* Global supply chain bottlenecks could “get worse before they get better”
* US will open borders with Canada and Mexico to vaccinated travelers
* China’s export growth was surprisingly strong in September
* UK economy continued recovering in August
* Eurozone industrial output fell in August amid supply constraints, slower growth
* US small business sentiment ticked lower in Sep, well below recent peak
* US workers quit their jobs at record pace in August: